Privatization of Medicare Does Not Work

Tens of thousands of Medicare recipients have been victims of deceptive sales tactics and had claims improperly denied by private insurers that run the system’s huge new drug benefit program and offer other private insurance options encouraged by the Bush administration, a review of scores of federal audits has found.

The problems, described in 91 audit reports reviewed by The New York Times, include the improper termination of coverage for people with H.I.V. and AIDS, huge backlogs of claims and complaints, and a failure to answer telephone calls from consumers, doctors and drugstores.

Medicare officials have required insurance companies of all sizes to fix the violations by adopting “corrective action plans.” Since March, Medicare has imposed fines of more than $770,000 on 11 companies for marketing violations and failure to provide timely notice to beneficiaries about changes in costs and benefits.

The companies include three of the largest participants in the Medicare market, UnitedHealth, Humana and WellPoint.

The audits document widespread violations of patients’ rights and consumer protection standards. Some violations could directly affect the health of patients — for example, by delaying access to urgently needed medications.

In July, Medicare terminated its contract with a private plan in Florida after finding that it posed an “imminent and serious threat” to its 11,000 members.

There are just some things you don’t privatize!

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Did you know that don’t get to choose whether you want Original Medicare or Medicare Advantage? Your former employer does, and you have to go to Medicare Advantage, which is really private Medicare DISADVANTAGE, to keep you supplement, if they chose it. Medicare Advantage, has to give similar services, but not all the same services, nor pay the same rate, nor have all the Medicare providers. They can operate it as a PPO (Preferred Provider Organization), which will probably and most assuredly be a much, much smaller network. They do not have to have all the Original Medicare providers, or even a small part of them. The Advantage Plan need meet only “CSM ratios”, Central Medicare Services Ratios, which means so many providers of a certain types within so many minutes, of so many plan participants. Since each of these private plans is small, with a small number of participants, when compared to Original Medicare, you could end up with a very small network. Say there are 5 nursing homes in you town, and 2 aren’t in you plan, and 2 are full; you end up in the worst nursing home in town. Remember the farther you live away from your former employer, the less of a network you will probably have, since it’s based on the number of participants in a given area. Also you could have problems going to specialists and better hospital outside your home area. Say you need to go Sloan Kettering or John Hopkins, if they’re not in your plan, even through they take Original Plan, then you could end up paying say 30 to 40 % more to go there, than those with Original Medicare. So in order to Original Medicare providers not in you Medicare Advantage network, you will have many additional charges. There will probably be double coinsurance charges, double deductible, double Out Of Pocket Maximum , same as out of network costs in other private insurances. Also the Medicare Advantage Plan can add other out of Network fees. You will also be paying the difference between the Medicare Advantage rate and the Original Medicare rate, if out of network. Of greater concern is that no one will be setting usual and customary charges when out of network, which means you could have to pay and additional 20% to 35% of the bill. All this to use a provider, that everyone gets to go to if they have original Medicare, but we have to pay more with Medicare Advantage. It would work the same way with a Medicare Advantage Private Fee for Service Plan (PFFS) if you go to an Original Provider who doesn’t take their rates, then we have to pay the difference, to use an Original Medicare provider under Medicare Advantage, than when using that provider under Original Medicare with a supplement from our former employee. Lastly the network or Medicare Advantage provider can be changed yearly by your former employer, so you really can’t count on anything. Also Original Medicare allows a second supplement, and Medicare Advantage does not. Original Medicare has a really broad network, all providers in the country who accept Medicare, so it’s near impossible to be out of network, and have all those extra costs. Medicare Advantage costs us more of our tax dollars, while the Medicare DIS- Advantage companies make outrageous profits on our tax dollars just to give out our own tax dollars and supplement premiums, and severely limit our access to many of the Original Medicare providers. We lose choice and it costs us more.

This note only applies to some people, but constituted another take away of benefits that applies only to couples, where the spouses both worked and carried insurance on themselves and each other, one through one former employer and the other through another employer related plan. With Traditional Original Medicare when they retired, Medicare, of course, is the primary payer and pays first, and then through a Traditional Coordination of benefits, the private plans through the employer pays second, and the spouse’s plan pays 3rd, if there is anything left to pay. (This reverses for your spouse). This situation continues even, after both are on Medicare. In other words, Traditional Original Medicare allows 2 supplements. However, Medicare Advantage does not allow 2 supplements so you are forced to drop either your spouse’s insurance or yours. So after both have worked a lifetime for their employers, and earned both supplements, Medicare Advantage won’t let you have the 2nd supplement.
So just by forcing retirees on to Medicare Advantage, former employer’s supplement has not only changed its benefits, but denied participants the right to participant in Traditional Original Medicare, and for those who had a 2nd supplement (for which their spouse worked) forced them to lose it. It messed up 2 to 3 insurances for each participant, with the stroke of a pen. Medicare Advantage rules steal the second supplement from participants, while providing a smaller network. Only the insurance companies win.